Are Boards Ready for the Next Crisis?
Two new reports highlight the stressors CEOs are facing these days. But they give short shrift to the role board members can play in addressing them.
These are high times for high anxiety among leaders. Last week, many of them convened in Davos, Switzerland, for the World Economic Forum (WEF), and the new PwC Global CEO Survey released there revealed a lot of pessimism in the C-suite.
For instance, nearly three-fourths of the CEOs surveyed anticipated a decline in growth in the coming year, and 39 percent were concerned that their businesses won’t be viable in a decade. Throw in some lingering supply-chain concerns and global conflicts, and it’s understandable why leaders feel unsteady.
Another new survey puts some numbers around the feeling: According to a new report from the Conference Board, fewer than half of global CEOs surveyed say they’re prepared to handle crises around a pandemic or cybersecurity, or for a stretch of financial instability.
Naturally, the reports have a few prescriptions for how organizations should respond to this state of affairs. WEF, for instance, uses the PwC report to recommend that leaders should rethink their company’s value proposition, developing “a willingness to answer the most elemental questions about a company, such as: ‘What unique value do we contribute in today’s world—and tomorrow’s?’” Both PwC and the Conference Board also stress the importance of retaining and developing talent, a sensible idea as the workforce remains unsettled.
But it’s somewhat surprising to see one tactic get neglected: Engagement with the board, which ought to play a central role in how organizations identify and respond to crises. When the Conference Board asked CEOs to name their top priorities for 2023, matters like talent, revenue, and digital transformation were on the “high focus” agenda. Listed as a “low focus”: “Improve board governance.”
Meanwhile, the PwC report’s guidance around governance is almost insultingly basic, recommending that organizations avoid bias by “soliciting views through independent consultation or questionnaires, structuring discussions to consider overlooked possibilities (for example, by asking, ‘What do our competitors hope we will do?’ and ‘What do they fear we might do?’).”
All well and good. But those exercises won’t help an organization make progress if the board isn’t designed for strategic thinking, and if leaders don’t work to attract board leaders who have a mindset and experience for addressing potential crises. As a blog commenter in tough-love mode once put it in response to a post of mine on board preparedness: “Board members who feel ‘skittish’ about learning with the future and preparing their associations for a full range of plausible futures should reflect on their motivations for board service and perhaps reconsider whether it is the right choice for them.”
Similarly, leaders who discount the role of their boards in addressing future priorities should consider that all the responses to high-priority concerns—staffing, economic headwinds, cybersecurity—flow out of the board itself recognizing those things as a priority. It may be a useful exercise for leaders in 2023 to look at what’s keeping them up at night versus what’s doing the same for the board. If those things are out of alignment, some changes may need to be in order. Because while it’s hard to predict the future, crises will always be there, and it helps when everybody knows they’ll be coming.
(Delmaine Donson/iStock/Getty Images)